In the years before 1974, private physiotherapy practices were few and far between in New Zealand. Patients either paid the full cost of treatment themselves, or claimed against private insurance schemes which had highly unregulated fee structures and were unwilling to negotiate fees with physiotherapists locally or nationally. With the passing of the Accident Compensation Act that year, a new market was created for private physiotherapy with the provision of full fee compensation and unlimited treatment for accident and injury. The provision proved to be highly attractive to private physiotherapists because they were able to charge the Accident Compensation Commission (ACC) with a bulk fee for service, rather than the $4 per treatment that ACC had initially wanted.
With hindsight, the generosity of the early ACC provisions was both a blessing and curse for physiotherapy. It was almost certainly responsible for driving a massive expansion in private practice, and shifting the philosophical focus of the profession towards musculoskeletal physiotherapy and the management of sports injuries.
In some ways the provisions were too generous and some unscrupulous practices began to emerge. Because the ACC paid out on the number of patients seen, stories began to emerge of physiotherapists treating six or more patients at the same time – everyone being plugged in to the latest labour-saving electrotherapy device; endless repeat treatments for minor impairments; overcharging; and, inevitably, poor quality care with little or no consideration for the scientific basis of the treatment being given. Within two years of the enactment of the legislation, the New Zealand Society of Physiotherapy became concerned enough with these practices to ask Michael Lamont (then President of the Private Physiotherapists Association), John Maule and Brian Mulligan to act as referees in cases where the ACC felt they had uncovered a “problem account”. By 1979, the fully funded provision was revised to a “pay-as-you-go” scheme and co-payments, or surcharges, were introduced on top of a fixed fee for each treatment, which many will remember remained almost unchanged for more than a decade after.
The contrast between ACC’s largesse in 1974 and its stinginess in 1979 can be only partially explained by the greed of a handful of practitioners. Probably the greatest driver of change was the larger economic downturn that affected all the major countries after the oil crisis of 1973/4. At the time, the Oil Producing and Exporting Countries (OPEC) drove the price of oil up to such an extent that entire national economies were thrown into recession.
Governments reacted with stringent cuts in public spending. Cuts were made in education, housing, health care, and social welfare, and governments began to look for new ways to manage public finances. Some have argued that these economic changes heralded the end of the welfare state and opened the door to Margaret Thatcher’s, Ronald Reagan’s and, more locally, Roger Douglas’s economic reforms of the 80s and 90s. Almost certainly, the oil crisis had a profound effect on physiotherapy, coming at the same time as the boom in private practice. The focus on hospital-based care, which had been the mainstay of the profession’s curricula, its relationship with medicine, and its visibility to the general public, began to shift towards the management of soft tissue injuries, neck and back pain, and sports rehabilitation – from which it has never returned.
NB: Originally written as part of the New Zealand Centenary History Project.
